How to charge depreciation ?????

Hi Gunjan,

I assume the physical life of the asset is 10 years, but however there are circumstances under which Depreciation can be provided for less than physical life is the useful life is less than physical life. Physical life for the General Equipment is 10 years and the useful life is 5 years. You could charge depreciation for 5 years provided your need lies in any of the below mentioned factors:

    i) any legal or contractual obligations

   ii) directly governed by extraction or consumption

   iii) depends on the extent of physical deterioration on account of usage

   iV) change in technological conditions

   v) change in market demand for product

  vi) legal or other restrictions

Thanks

Rathna